Capital gains tax on property?

gazareth

00ec25 wrote: »

the gain is 50,000
assuming equal shares each person is has a gain of 16.66 less 10.6 so is liable for CGT on 6,066 . There is no carry over of unused personal allowance, yes it is called an annual allowance but in this case that means one time only in each year not a rolling "annual" sum

the CGT on 6,066 would at the worst case of all at 28% be 1,698.67 leaving you 16,666 - 1.698.67 =14,967
if all of it is at 18% then you'd keep 15,574

agreed no one likes paying tax but the sums involved in this case are hardly significant

You can also deduct selling costs. e.g. if property is sold for £59k and estate agent fees and solicitors fees are £2k then the gain is £48k, not £50k, so £16k each and so the liability is £5,400. CGT is 18% (£972) for basic rate tax payers and 28% (£1,512) for higher rate payers.

seashore22

Thank you so much for all the help and advice.

Each sibling owns a third share of the property, not tenants in common though.

I will definitely look into the dependant relative relief as it looks like it may possibly apply. The person concerned would have been totally incapable of working.

seashore22

martinsurrey - thanks so much for that link. It was extremely useful and I will show it to my husband later. Looks very promising.

We have no interest in avoiding tax if it is due. However this won't just help us, it will also help my husband's family. They probably need it more than we do.

Mojisola

seashore22 wrote: »

The property was bought by the 3 siblings for an older relative to live in. The relative never owned the property and they didn't pay rent to the owners. Hope that helps.

seashore22 wrote: »

I will definitely look into the dependant relative relief as it looks like it may possibly apply. The person concerned would have been totally incapable of working.

That was a lovely thing to do and has saved the taxpayer years of housing benefit being paid so I hope you can get the dependent relative relief.

seashore22

Thank you for the compliment, but I don't think that they would want to take any credit. It just seemed like the best solution to a very difficult and upsetting situation.

As it happened, it worked out well. The relative had a safe, comfortable home for 30 years, although it wasn't without it's traumas. I think we will just be happy when the property is finally sold, instead of standing empty.

In case you were wondering, the person hasn't died and is still going strong at a ripe old age. Just moved to a lovely care home.